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Policies and Procedures

Policy 701 – Encumbrances

Effective
March 1, 1998
Last Updated
February 2, 2015
Last Reviewed
February 2, 2015
Responsible University Officer
Director of Systems and Operations
Responsible Unit
Disbursement Services

Policy Statement

To maintain accurate accounting for all budgets, the University utilizes encumbrances. Encumbrances are Commitment Control entries that record a commitment of funds by removing them from the budget balance available (BBA). All University online payment mechanisms (campus vouchers, independent contractors, purchase requisitions, purchase orders and travel authorizations) encumber funds.

Reason for Policy

Efficient and effective financial controls are an important tool for the University in safeguarding its resources. Proper control over receipts and disbursements is essential for any organization. Encumbrances provide an effective method of tracking commitments across a wide range of departmental end-users — an important control feature given that some procurements require a long lead time for the vendor to supply the merchandise or perform the service.

Exclusions

Manual payment mechanisms (petty cash reimbursements and wire transfer requests) are not encumbered. They are recorded as direct expenditures against the chartfield string.

Special Situations

None

Procedures

 

None

Additional Information

Frequently Asked Questions

Q: Why doesn’t my purchase order show up as encumbered for the same amount as the requisition?
A: The requisition amount is generally an estimate of the cost for the merchandise. The purchase order will state the actual cost based on contract prices, discounts, etc.

Related Data

None

Contacts

SUBJECT CONTACT TELEPHONE FAX E-MAIL
Encumbrance Control Disbursement Services (Encumbrance/Liquidation Technical) 919-843-5047 919-962-2356 disbursementsteam@unc.edu

 

History

Revised:
February 2, 2015: Updated references to campus vouchers and chartfield strings; removed Q&A and procedure.
May 20, 2010
July 27, 2007
October 14, 2003